Lockyer Valley Regional Council

Submission to the Senate Economics References Committee Inquiry into Regional Inequality

30 April 2018

Introduction

This Submission has been made by the Regional Council to the Senate Economics References Committee (the Committee) to:

• highlight the very real inequalities that have been identified • give examples from our regional context, and to • demonstrate the at times seemingly ad hoc approach to policies.

These policies are failing to address these inequalities and are therefore failing regional communities.

It is beyond doubt that regional inequality exists. The Socio-Economic Indexes for Areas (SEIFA) developed by the Australian Bureau of Statistics clearly demonstrates this inequality. Regional and remote Australia has very real imbalances. What is less clear is whether or not there is a genuine desire by Commonwealth and State governments to address this imbalance and whether strategies can be identified and implemented in any meaningful way.

The SEIFA statistics demonstrate that regional inequality increases outside our capital cities. The statistics also reveal a common misconception - that the further you proceed from the coast or our capital cities, inequality increases. Again the SEIFA statistics are revealing and demonstrate a variety of advantage and disadvantage across States and Territories. For example, the administrative centre of the Lockyer Valley is situated at Gatton which is located in South East (SEQ) less than 100 km from the GPO. Yet this local government area clearly demonstrates regional inequality in a range of areas including health, education, regional unemployment, regional development and infrastructure delivery.

In the past our Mayor has referred to Lockyer Valley as “outer regional” as, while located in SEQ, she feels our region is very much “on the outer” when it comes to decision making at a National and State level – particularly in those areas of inequality listed above. This submission seeks redress to the long standing gaps in regional inequality for regions such as the Lockyer Valley - gaps that seem to be created at least in part by overlaps, or underlaps, in government responsibility, funding or programs of implementation.

Lockyer Valley Region

For the Committee’s benefit and by way of context, the Lockyer Valley is a modestly sized local government area in . The region is a key agricultural area for the State and country growing produce for domestic and international markets. The region also has significant manufacturing, construction and transport industries. Some relevant statistics include:

• A population of just over 40,000 people and growing at about 1.8% per year • An expected population by 2036 approaching 60 000 people • A workforce with strong ties to agriculture, manufacturing, construction and transport • Unemployment at 7.0 % (State average 6.1%) 1 | P a g e

Lockyer Valley Regional Council

• 18.7% of families have children under 15 and no parent employed (State 13.8%) • Significantly lower median family income than the State and National averages • Tertiary education to a Bachelor level is 9.5% compared to the State average of 18.3% • Significant health issues exist with all social determinants of health and all health indicators worse than State averages.

These statistics demonstrate clear levels of regional inequality. Many issues are at play in this context. Perhaps some are not within the capacity of government to address. However, one broad issue that the Committee may be able to address is the lack of clarity over funding and responsibility between Commonwealth and State levels of government for a range of policy areas.

Once clarified, perhaps the overlaps and underlaps can start to be addressed. The responsibility distinctions are not well understood by the community – they just suffer the consequences. These responsibilities impact on communities in areas such as health, education, infrastructure and regional development and unemployment. These matters are discussed briefly below.

Health

The towns of Gatton and Laidley are both served by local hospitals. However, these hospitals do not conduct surgery and are only serviced by a small number and range of visiting specialists. All surgery, maternity services, most specialist consultations, and medical emergencies need to be dealt with through regional hospitals based at , Ipswich or Brisbane. These hospitals are considerable distances away and accordingly service levels are low. This situation is compounded by the absence of any meaningful public transport option. Combined with high unemployment, low wages, and ageing population this situation often renders services inaccessible, unattainable or unaffordable. This in turn leads to poor health outcomes for residents of this region.

This assertion is supported by Medicare data indicating that residents of Gatton and Laidley report the costs of medical services and the difficulty of accessing services as barriers to obtaining health care at significantly higher rates than Queensland residents generally.

For some time Council has been seeking government consideration of a regional hospital in the / area (which has been, and will be, the fastest growing part of the region). Clearly smaller regions such as the Lockyer Valley cannot expect the full suite of specialist services and it is recognised that some services are likely to be only available at Brisbane hospitals for the foreseeable future. However, a regional hospital with basic specialties such as surgery and obstetrics should be achievable in a Lockyer Valley regional facility.

This example of regional inequality is raised to highlight the lack of government planning, lack of funding assessment, and the lack of understanding/acknowledgment that this regional problem exists. This is despite apparent record spending in the Health portfolios of both National and State governments.

Education

Delivery of schools is largely a State matter – though again funding is a mix of National and State expenditure. It is not clear if this divide contributes again to the lack of cohesive planning and the poor outcomes found in regional educational facilities.

As an example the Hatton Vale State School was relocated some years ago from its previous location on the to a location with safer access. Unfortunately the school is 2 | P a g e

Lockyer Valley Regional Council

already outgrowing its location and capacity and will soon need an upgrade or another new school. This is despite clearly anticipated population growth.

The Public High Schools in Laidley and Gatton are both catchment capped and at capacity, with significant waiting lists, yet little is known of plans for additional facilities or schools in the region. With crowding at schools and limited access, it is not surprising that the region has school completion levels lower than the State average and significant underrepresentation in tertiary education. Again this example is to highlight the apparent lack of coordination between State and National Governments.

Regional Development

The Committee will no doubt be aware of the recent Productivity Commission Study Report entitled Transitioning Regional Economies . The Productivity Commission findings and recommendations in this report are relevant in understanding regional inequality.

A number of findings and recommendations are pertinent:

• Finding 3.1 Many regions with low rates of employment growth have a large agricultural base.

• Finding 3.6 Efficiencies and technological innovation are generating higher levels of agricultural production using less labour. This is driving a long term trend of lower employment in agricultural regions. There is also a pattern of consolidation from smaller towns to larger regional centres which affects the social fabric of these communities.

• Finding 5.1 Significant benefits would arise from expediting regulatory reforms in land use planning and development, environmental, agriculture related regulation and occupational licensing.

• Finding 5.2 (In part and relating to regional program funding) Failure to set out clear objectives, build capacity and adequately plan for new spending risks regional communities missing out on opportunities and taxpayers’ funds being squandered.

• Finding 5.3 Strong and effective local leadership is critical in developing and implementing regional development plans. There is a case for State governments to build capacity in leadership in regional institutions and community groups to ensure the groups can attract skilled leaders.

• Finding 5.4 (in part) Although all tiers of government have a shared interest in regional development, central responsibility for regional development best resides with State and Territory governments, supported by local governments.

• Recommendation 5.2 (in part) Current discretionary funding allocated by the Australian Government specifically to regional development (such as funding for regional grant programs, City Deals and the Northern Australia Infrastructure Facility) should be subject to independent, rigorous and transparent evaluation.

• Finding 5.5 (in part) As a regional development strategy, decentralisation is unlikely to make a long-term, systematic difference to regional growth and resilience.

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Lockyer Valley Regional Council

• Finding 5.6 (in part) Past assistance to industries and regions has often been costly, ineffective, counterproductive, wasteful, poorly targeted and inequitable.

These findings and recommendations appear to have a theme. There is no easy solution to regional inequality particularly for regions dependent on agriculture and other industries that are evolving. But, clearly, spending on programs needs to be carefully evaluated, equitable and targeted and carried out in consultation with the level of government closest to the communities.

Regional Unemployment

As indicated above the Productivity Commission identifies poor targeting across government programs ostensibly for regional development.

One clear example of such a program is the Works For Queensland Program (W4Q). The W4Q Program was established to provide economic stimulus and to create employment in rural and regional Queensland - a laudable ambition. In the 2017/19 W4Q program of $200M, eligible Councils received a minimum amount of $1M, five Councils received more than $10M with an average for eligible local governments of more than $3M.

Given the objectives of the program it would be considered logical and equitable that such a program target areas of high unemployment in rural and regional areas. However eligibility was not on the basis of unemployment or the regional nature of the regions but was simply made eligible to all local governments outside South East Queensland.

This resulted in modestly sized regional local governments, of an unmistakably rural nature, being deemed ineligible. Local governments such as Lockyer Valley, Somerset and Scenic Rim Regional Councils were ruled out despite having a combined unemployment rate of 6.9% - higher than the State average of 6.1% and higher in turn than the average unemployment rate of similarly sized local governments currently receiving the funding under the W4Q program (5.5%).

The 2017 LGAQ conference noted this inequity and called on the State Government to redefine eligibility criteria. To date the criteria have not changed and this flawed and inequitable program continues to contribute to further regional inequality. This reinforces the finding of the Productivity Commission of the need for better targeted regional development programs and the need for proper engagement with local government.

Infrastructure – Benefits and Costs

The provision of large scale infrastructure creates winners and losers across States, Regions and local communities. South East Queensland is fortunate to have the Toowoomba Second Range Crossing which when completed will provide transport users (national, regional and local) and the with considerable benefits. It also has significant costs for land owners directly and indirectly impacted by the route and for communities disrupted by the construction and ultimate operation of the road.

However these impacts will pale in comparison to the impacts of the proposed Inland Rail Project. There will no doubt be National level benefits and freight transport will be boosted (provided there is also significantly improved connection to the Port of Brisbane). However, some regions including the Lockyer Valley will pay an enormous price for the net benefits to the Nation.

There have been no substantial benefits of the Inland rail project identified for the Locker Valley. No intermodal facilities or stations are proposed in this region and our producers and 4 | P a g e

Lockyer Valley Regional Council

manufacturers generally will not utilise the inland rail service and will therefore not accrue benefit. No public transport is proposed.

The corridor runs directly through the entire region from west to east dividing communities along the route. Trains 1.8 km long (with potential to increase to 3.6 km) of double stacked containers or coal wagons will be in operation 24/7. Our community’s’ amenity will be seriously compromised (noise, light, dust, vibration). Community severance will be a serious issue. Increased flood risk, a reduced rates base and reduced property values have been identified as key concerns. This is on top of hundreds of directly impacted landholders and businesses.

Even with significant mitigation and potential compensation for communities this is an impact that will create further regional inequality. This is difficult for communities to comprehend, understand and accept. In some way governments and the winners from such projects need to be able to compensate the communities who have suffered loss from such projects.

Concluding Remarks

It is clear that regional inequality exists. While correlations may exist with a region’s level of remoteness, it can also be demonstrated that this inequality exists in close proximity to capital cities. This problem may increase as housing stress forces more people to urban fringes.

One contributing factor to regional inequality may be poorly integrated government policy across all levels of government. The Productivity Commission report indicates that local communities may suffer through poorly targeted regional development programs. Perhaps such programs at times can be influenced by political imperatives rather than the need, and capacity, for real change.

Regions should not be “outer regional” in terms of consultation and decision making. Programs need to be motivated by genuine need, equity and potential for success.

There also appears to be a compounding effect at work that the Committee may wish to examine. On their own perhaps some disadvantages can be overcome - but where disadvantage is found in some combination (or all of) income, health, education and access to services, then substantial dis-benefit and a cycle of disadvantage seems to be encountered.

It is hoped that the Senate Committee can further examine these issues and provide bipartisan recommendations and genuine leadership to tackle regional inequality.

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